Insured Hurricane Michael Losses Likely Higher Than Estimated

Feb. 20--PANAMA CITY -- Estimated insured losses for Hurricane Michael have passed $5.6 billion but could be even higher because the number of closed insurance claims reported to the state might be overinflated.

In a recent Bay County town hall meeting, Florida Insurance Commissioner David Altmaier said his office was aware of the discrepancies with closed claims. The office hopes to institute better reporting methods for insurers so it can provide more accurate information to the public after disasters, he said.

"This is an issue we're aware of ... we're going to institute a new reporting category," Altmaier said.

Some have said the number of closed claims reported to the Florida Office of Insurance Regulation is misleading, given that many claims likely will be reopened because the initial payments to the policyholders were too low.

"That's just the initial payments that have been made," Panama City insurance agent Jody Detrick said at the meeting about reported closed insurance claims. "The carriers, they want to write that check and move on, but that doesn't seem fair to the consumer."

Altmaier said during a panel discussion in Panama City last week that "it's unclear right now," if the current estimate of insured losses was lower than it should be for the storm.

"What we publish on our website is data we get from the insurance carriers ... we're doing what we can to make sure it's as accurate as possible," Altmaier said.

According to the office of insurance regulation, as of Feb. 15 about 77 percent of Hurricane Michael insurance claims were closed. The office estimates more than $5.6 billion of insured losses, based on the reported claims to date.

And of the total 145,685 claims reported, the majority of them, 87,724, are from Bay County. The office reports that about 73 percent of county insurance claims are closed.

But again, officials said a portion of those closed claims will be reopened.

State law requires that property insurers pay at least partial benefits owed within 90 days after receiving notice of a claim. Those claims are then closed so insurers can move on to the next claim. However, insurers can reopen the closed claims later at consumers' request as more accurate contractor repair estimates are determined.

"Once they've made the payment to the consumer, they probably circle back to them later," Altmaier said, referring to reopening of claims.

Altmaier said to improve reporting accuracy, his office wants to create a middle ground category for claims that are closed but likely will be reopened to reassess and increase payouts.

"It's more of an issue of we want to differentiate between claims that will be circled back to and ones that are closed," he said.

Wilson Ellis, co-owner of S&S Contracting Services in Panama City, said the issue of claims being closed after only partial payments are made is a problem in the county.

"They close it automatically and I feel sorry for some of these people who are 70 and 80 years old," Ellis said. "I tell them to reopen the claim and they say 'I didn't know you could do that.' "

Ellis said the whole process has frustrated homeowners, who often direct that frustration at contractors.

"They give that contractor the payment from the insurance and it's $5,000 on a $100,000 repair job," Ellis said. "Then the homeowner gets mad thinking, 'why is the contractor not doing anything on my house.' Well, he can't do any repairs on just $5,000."

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